Custom «Product Repositioning» Essay Paper

Product repositioning is the strategic and purposeful act of creating an image for a certain brand in relation to other products in the market (McDaniel, 1982). Brand image refers to how the customers view a product. Consumers usually categorize brands in terms of predetermined variables including the price and the quality of the product. The purpose of repositioning a product is to attempt to move it to a higher stage in the product life cycle, which eventually helps to increase product sales and stabilize the profit margins. It also helps a company to take new strategic directions in the market (McDaniel, 1982).

One of the products being manufactured by Anheus Busch, Budweisser, has lost popularity in America over the last five years. This has been depicted by a drop in sales by 30%. This product, therefore, requires repositioning to ensure that it increases its sales to reach its previous levels. To this effect, the product has been engaged in repositioning itself in America so as to recover its status (Zikmund & D'Amico, 1989).

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Repositioning of the product emerged as a result of the merger between Anheus Busch and InBev beer producers. Their aim was to highlight the sociability of the brand other than the previous advertisement messages, which touched on quality and authenticity.

The brand has sought to attract more of young drinkers than the aged, which specifically to the ages between 18 and 24 years. They have done this by targeting the young population through social networks where most of them interact. The product targets that this strategy will raise their sales by a large percentage since people between these ages are engaged in parties where beer is mostly consumed. 

Types of Research Needed to Reposition a Product in USA

Repositioning a product requires thorough research on several factors that will affect its profitability in its new market. These products differ according to the effects each has on the product (Zikmund & D'Amico, 1989). A well done research will allow proper awareness of the market and what to expect and thus making repositioning a success.

One of the researches necessary is identifying the existing competitor in the market. It is necessary to know who the product will be competing with in the market currently before carrying out the repositioning. Identifying these competitors will help to determine whether the product has chances of growth depending on the strength of the existing competitors in the market.

The producer should carry out a research to determine the customer’s tastes and preferences. The customers, who in this case refer to the young drinkers, keep changing their tastes and preferences due to the changing needs. This will help to design a beer that will best meet their interests and thus have an advantage in the market. Remaking the beer in a more consumer friendly way will increase the market base for the product.

Customer expectations should be researched on. Whenever the product is being repositioned, the company should first seek to know the expectations that the customers have on the product. The customers have different expectations on the product since they expect it to be rebranded. Therefore, during rebranding, these expectations will be considered to ensure that the customers accept the product with ease as it meets their desires (Zikmund & D'Amico, 1989).

Another research that should be done is collecting information about the target market. Determining the target market is necessary since it helps the firm to make enough arrangements on the needs that fit that target market. Different markets have different needs based on the location of each market. In this case, the producers have targeted adults aged between 18-24 years.

Proper methods of repositioning should be determined. These are the methods that will ensure that the process will end up a success and that the goals and objectives are met. The methods to be implemented should, therefore, be identified early enough to avoid failures or situations where the process fails to come into completion due to challenges. The producers have adopted an aggressive advertisement technique to carry out the product repositioning.

Methods Used to Increase Adoption Rates

Adoption is the acceptance of the product by the market. The rate in which the market accepts the product is of essence in determining the profitability of the product. Before repositioning, product adoption rate should be determined so as to estimate the viability of the project before it commences. There are different methods used to increase the adoption rate of a product as discussed below.

One of them is marketing of the product in the market. Marketing helps to create awareness of the product in the market. It also helps to convince the existing customers of the superiority of the product and thus helps retain them. There should be thorough marketing, with strong marketing strategies such as advertising, on the product to make it well known in the market, especially to the areas where they do not have information on the product (Institute of Marketing and Sales Management & Institute of Marketing, 1968).

Promotions are also ways of increasing the product adoption. Promotions play a key role in making the customers to get interested in the product. I would create promotions on the product to ensure that the customers get a chance of using the product at different levels. The producers should, therefore, consider having promotions on the product in order to hit the market quickly.

Product differentiation is another way of increasing adoption. Differentiation can be on the product type and also one that differentiates the class of people that use the product. Differentiating the product in terms of its quality will make it unique as compared to other products.  Differentiating it in terms of prices will ensure that all classes of individuals can be able to purchase the product without interfering with their social class.

Using different packaging also helps in adoption of the product. An individual might lack capability to purchase large quantities of the product. Thus, making packages of the product with different sizes or quantities will allow each individual to purchase the product depending on one’s income or capability.

New Service Component

A new component means that the product has been differentiated or has become dynamic. This means that the product is more diverse and that there will be more ranges within which the customers can choose from. Therefore, the product will be different from its competitors, making it unique and thus will be highly profitable.

For a product to be unique, it has to bear different characteristics from its competitors. Customers mostly look for different characteristics from the existing products. Thus, adding a new component will attract the customers to use the product thus increase their interest into the product usage. 

Distribution Problems

There are problems that might occur during the distribution of the product after its repositioning. Since, the product has not been fully accepted in the market. These problems are as stated below.

One of the distribution problems, which is likely to happen, relates to the main distributors. The existing products must have created contracts with the existing distributors. Thus, it will be difficult to make them to consider distributing the product since they cannot breach the contracts they made with other companies. This will result to lack of full and maximum distribution of the product to the target market. To counter this, the manager should seek to make contracts with well-established distributors in advance before the product hits the market.

Lack of adequate knowledge on the target market is another problem that might occur during distribution. The partners who are entrusted with the responsibility of distributing the product might lack adequate knowledge on the geographical boundaries or formation of the market and thus fail to reach the market fully as desired (Institute of Marketing and Sales Management & Institute of Marketing, 1968). This can be tackled by ensuring that a thorough market study is done and ensuring that the distributing partner is well equipped with every location in the target market.

Poor management of distribution channels is another problem that the product might face. For proper achievement of the goals set, the distribution channels should be well managed. Lack of proper skills means that the target will not be met, and thus, distribution will fail, especially where the supply exceeds or is lower than the demand of the product. This can be avoided by ensuring that the managers given the responsibility of running a distribution center are well equipped with the skills necessary to manage stocks.